Thousands of Chinese millionaires want to leave the country with a colossal fortune, but will Xi Jinping allow them?

A man wearing a mask walks down a street with a shopping cart. Measures against COVID-19 remain very strict in the Chinese city and citizens show signs of fatigue (Reuters)

Like thousands of wealthy people across Porcelainthe restorer of Shanghai Harry Hu he is planning to do something that he previously considered unthinkable: move himself and his money out of the country.

Scared by the chaotic closure of Shanghai low policy Covid-Zerowhich has turned to Porcelain in a worldwide exception, huh is joining what investment migration consultancy henley and partners estimated to be a cohort of 10,000 high-net-worth residents who intend to take $48 billion out of China this yearthe second largest projected outflow of wealth and people for a country after Russia.

The big question now facing the rich in Porcelain is if the government of the President Xi Jinping will let them go.

Although policymakers have not explicitly tightened restrictions on offshoring, immigration lawyers say transfers have become more difficult in recent monthsas passport processing times have increased and documentation requirements have become more onerous. Moving large sums of money out of China has also become more difficult. following the withdrawal of foreign counterparties that had long helped residents circumvent the country’s capital controls through private swap deals.

This is preparing the ground for a new outbreak of tension between the rich Chinese and the Communist Party in power, which was already tense amid the president’s populist campaign Xi Jinping by “common prosperity”. The government has emphasized stability ahead of a leaders’ conference later this year, which is expected to xi win an unprecedented third term, but the long-term economic cost to the country of covid zero will be determined by the ultimate extent of the exodus of talent and wealth from Porcelain.

The possible outflows of people and capital are “a definite cost to the Chinese economy“, said nick thomasassociate professor of Hong Kong City University who has edited several books on pandemics and politics. In almost every country in the world, he noted, “the risk of Covid is being incorporated into economic plans and corporate models”.

Despite the obstacles to leave, huh said he intends to move to Canada.

A medical worker, wearing a protective suit and sitting with a block of ice between his legs, collects a swab from a resident at a nucleic acid testing site in Shanghai.  The fear of a new total closure of the city is permanent (Reuters)
A medical worker, wearing a protective suit and sitting with a block of ice between his legs, collects a swab from a resident at a nucleic acid testing site in Shanghai. The fear of a new total closure of the city is permanent (Reuters)

Can you imagine that I almost starved to death at the beginning of the lockdown in the most developed city in China?said the 46-year-old, who recently sold much of his majority stake in two high-end restaurants in Carry off for 20 million yuan ($3 million) and has hired an immigration attorney and wealth manager to help him relocate. “I’m so sad, but the time has come to go”.

Immigration consultants and attorneys in Porcelain said inquiries tripled or quintupled in the spring – when Shanghai was blocked – compared to the previous year. Inquiries about moving money out of the country have grown exponentially, according to interviews with seven bankers who did not want to be named because they are not authorized to speak publicly.

Many really felt like they had no other options given the Covid lockdown“, said sumia migration consultant Carry off that he did not want to give his full name to talk about the clients’ business. “I have seen that those who previously doubted emigration have finally decided this time”.

In another sign of the national mood, a recent note from the billionaire from Shanghai Huang Yimeng announcing to his employees that he plans to move his family out of Porcelain It went viral on social media. The CEO and president of the game company XD Inc. did not directly quote the closing and XDD told Chinese media that the move from Huang It was for family reasons. Still, the announcement fueled debate about people’s growing desire to emigrate.

Among the most popular destinations are USA, Singapore, Australia, Canada and places of Europe. Some of these countries have tightened migration processes or withdrawn investor visa schemes. Places where investment requirements are relatively low, such as Spain, Portugal either Irelandthey could also be more popular, said a private banker.

In Singaporethe number of family offices had almost doubled by the end of 2021 compared to the previous year, according to the Monetary Authority of Singapore. Demand has grown particularly rapidly among Chinese business families, suggesting that the ultra-rich have already moved abroad.

Nevertheless, “there are many institutional barriers” to get out of Porcelainsaid jennifer hsuresearcher of the Sydney Lowy Institute, Australiawho studies Chinese communities abroad. “You can have that desire, but there are several obstacles, especially from the Chinese side, much less from the place you hope to emigrate to.”.

The mere fact of obtaining the necessary documentation to leave Porcelain it is proving much more difficult today.

Xi Jinping during an inspection in Wuhan, Hubei province, on June 28, 2022. The head of the regime praised the Covid Zero policy imposed by Beijing throughout the country (Xinhua)
Xi Jinping during an inspection in Wuhan, Hubei province, on June 28, 2022. The head of the regime praised the Covid Zero policy imposed by Beijing throughout the country (Xinhua)

The Chinese government has discouraged non-essential travel since late 2020, citing coronavirus prevention measures as the reason. COVID-19. In May, the China National Immigration Administration He said he will strictly limit citizens’ unnecessary trips abroad and toughen the approval of entry and exit documents.

The immigration administration did not respond to faxed requests for comment.

A private banker, who spoke on condition of anonymity, said a client based in Carry off had recently tried to get a visa for her son to study at Singaporebut that the local government agency denied it.

Would-be migrants also need to be more adept at getting money out of Porcelain. Citizens can only convert 50,000 yuan into foreign currency each year. In the past, wealthier people have found ways around the norm, but some of those options are shrinking.

Just a year ago, the viable options for getting money out of Porcelain they included the use of cryptocurrencies or a private agreement with an overseas counterpart who wanted to send yuan to the country. However, the extensive crackdown on Porcelain on cryptocurrencies in recent years has seen the banning of almost all activities, including exchanges, initial coin offerings, mining, and transactions.

In the meantime, swap deals are getting harder to come bysince there are fewer and fewer people who want to move money to Porcelainaccording to a Hong Kong-based private banker who declined to be named because he was not authorized to speak publicly.

DavidResident in beijingwho declined to give his last name for sensitivity reasons, hopes that a fast track to obtaining a green card in EU can help you move money out of Porcelain. The government often allows those who have obtained permanent residence in another country to make a one-time transfer of a large sum of money.

I believe that the Chinese economy will face many challenges in the future”, said this 42-year-old consultant, who cited the slowing economy, Covid policies and geopolitical tensions as his motivations for leaving. “The United States will probably continue to offer more opportunities in terms of business growth”.

David He said he plans to apply for a EB-1 visa – which grants permanent residence to immigrants with extraordinary abilities – and then set up a business in Texas that uses data and AI to advise the oil industry.

Although the recent decision of Porcelain of reducing the hotel quarantine for international arrivals to just seven days has raised hopes that the country can continue to ease its policies of COVID-19the drawbacks and uncertainties of the country’s approach continue to disrupt daily life. Last month, xi reiterated its support for covid zero in a speech in wuhansaying that it was the most “economical and efficient” by Porcelain.

Many residents still fear that Shanghai can be closed again, since Covid cases persist and massive testing campaigns have been orderedwhile in other cities closures continue to be imposed.

For huhthe restaurateur, the slight relaxation does not make him reflect on his emigration plans.

I have thought about leaving China several times in the past and given up, but now I am determined to leave.“, said huh. Despite having submitted the materials for his visa and passport renewal application more than a month ago, he has not yet received a response.

(C) Bloomberg.-


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